Equity markets were mostly higher last week, with several U.S. indices reaching fresh highs after the Federal Reserve cut interest rates by 25bps, fueling expectations that more cuts could follow. The S&P 500 finished the week up 1.2%, led by technology stocks, while the Nasdaq gained 2.2%. Software, semiconductors, cybersecurity, and the “Mag7 group” all advanced more than 3.5%, as the AI trade continued to drive momentum. Notably, the Russell 2000 rose 2.2%, marking a new all-time high since November 2021.

In Europe, markets were broadly flat, while the UK was down 1.4%. Elsewhere, emerging-market technology stocks outperformed, up 3.2%, led by names such as Nu Holdings and MercadoLibre, which rallied alongside Chinese technology stocks (+2.7%). Year-to-date, Chinese internet stocks (KWEB) are up 42% in USD terms, far outpacing the Nasdaq Composite (+17%). However, concerns are building around the domestic rally, with stretched valuations, narrow breadth, and elevated margin financing activity. From a country standpoint, Brazil was among the best performers in EM, up 3.1% on the week thanks to stable domestic rates and lower inflation forecasts. On the other hand, Japan slipped 0.5% after the Bank of Japan unveiled plans to unwind $250bn of ETFs and REITs — an exit long anticipated but announced much earlier than markets expected.

Semiconductors had a standout week, boosted by Intel’s 23% surge following news of a $5bn Nvidia investment and a strategic partnership to develop future chips for data centers and PCs. The news lifted sentiment particularly for semiconductor equipment makers. ASML was up 15% last week.

On the regulatory front, FT sources reported that China’s State Administration for Market Regulation dropped its antitrust probe into Google, which had focused on Android’s dominance. The move was seen as conciliatory in trade talks with the U.S., while allowing Beijing to sharpen its focus on Nvidia as a key bargaining chip. Actions against Nvidia are aimed at encouraging adoption of domestic chips, with reports highlighting advances by Alibaba and Huawei. However, industry insiders concede that Chinese firms remain heavily reliant on Nvidia’s superior technology.

Within the Mag7, Tesla was the top performer, rising 7.6% after CEO Elon Musk purchased $1bn of Tesla stock, his first major open-market buy in years. Nvidia was the laggard down 0.6%.